tv Fast Money CNBC August 30, 2012 5:00pm-6:00pm EDT
move, in the dow. that hasn't happened since november of 2006. >> back then we did 60 days without a 1% decline. so we'll see if we can meet that. >> that's "closing bell." we'll see you tomorrow. "fast money" starts right now. >> it's been a brutal week. >> people are understand decide ed. >> wall street has been like watching paint dry. but now the day of reckoning is here. >> there's evidence of this want button. obviously there's the like button now. >> mr. chairman, you know what we want. >> at the end of the day, the federal reserve wants to keep its powder dry. you're not going it see something out of jackson hole. you're probably not going to see something in september. >> okay. what if we say pretty please? fresh from the trading floor, this is "fast money." live from the nasdaq market site in new york's times square, the only place on earth where they take pride in cooking hot dogs in dirty water, i'm brian
sullivan in for melissa lee. will ben bernanke make a move? that's the big question out of the fed's chair big speech in jackson hole, wyoming, tomorrow. stocks today, though, seemed to maybe already have the answer. major u.s. averages falling as the hopes for more easing appear to have eased themselves. at least for now. let's turn to our traders. what do we make of today's action? john. >> i like the action today. i think this is typical of what we -- >> on the short side. >> it is. we talked about it earlier in the week. we said, what are you going to see ahead of this fed meeting in jackson hole? you're going see selling. why is that? nervousness always occurs before these events. it's happened every time whether it was greece, spain, italy, u.s. issues. it's always happened, folks. has it been a buying opportunity? the answer is yes. now, whether or not this one will be, we don't have to wait even 24 hours to find out that answer. >> it's interesting. i think everybody's pointing to
the holiday week. i understand that. i think this week is far more important than people realize in terms of the next 100 points in the s&p. i'm pretty convinced a couple weeks from now we're not going to be here now. i don't know if we're going to be higher or lower, but my point is don't fade whichever way it goes. if this thing starts to break down, don't get in the way of this. to the contrary, if you can get a push to 1425, don't get in the way either. the market is not staying here. technically it makes sense that it's going to have a huge move. obviously, i favor the downside. but if it starts to run on the other side, i'm not going to get in the way. >> just to build on that, if you look at what the markets concentrate on, it's been all about quantitative easing. now the market may be focusing on fiscal policy both here in the u.s. and the fiscal policies in europe. if the market does start to break down and bernanke hits at qe, you know the game has changed a bit, and you're going to want to play from the short side from now on.
>> excellent point. with the knowledge of that, again, i reiterate the trend is your friend. you want to stick with the the assets that have been working. they're going to continue to work. for those that are expecting a significant reversal in the u.s. dollar, for the u.s. dollar to go lower and thus energy and materials and builders to lead the market as they did back in 209 -- 2009, i think that's a false expectation. where do you want to be? you want to be in the u.s. centric plays. you want to look at the financials. you want to look at consumer discretionaries. you want to look at retail figures we saw today, which were excellent. >> got to go the options, guys. mike. >> i think a lot of the disappointment today wasn't just about qe. it was also about news coming out of germany and asia. so we don't see good economic data elsewhere around the world. the other thing we have to remember about qe, the fed can essentially create money, but
you need a take-up on the credit side essentially to get things fueled. we haven't really seen that. if you exclude the creation of financial debt, you're not seeing a big increase in net credit. that's what you need for this to work. >> well, let's drill down a bit more on what we can expect to hear from ben bernanke tomorrow at jackson hole. joining frus the symposium is the man, the former morgan stanley nonexecutive chairman, the actual chairman of the fed. the chiefs economic correspondent at "the wall street journal". he seems to disagree with that. the markets seem to be saying easing is a little less likely. is it? >> i don't think much has changed from what the fed has said over the last couple months. the market has been -- people have been talking about how they're going to be disappointed tomorrow. i think we need to understand a couple things. first of all, ben bernanke doesn't come to these conferences to launch big policy initiatives. that's not what this is about.
but i think the comments he makes tomorrow are going to be filled with substantive information that's very meaningful and very informative about what they do next. you know, i expect a very substantive speech tomorrow. >> yeah, define substantive. will it be new? >> well, i don't know. maybe for a geek like me it's not what the market wants, but i've got a lot of questions. how much conviction does the man have about bringing unemployment back to the kind of levels we're used to? how much conviction does he have about getting the economy moving a little bit faster? you know, what does he think about the commitments that the fed has made? there's a lot of debate going on inside the central bank right now about its communication. can they communicate their convictions. more clearly? i think we're going to see touches of this, not only tomorrow from the chairman, but from a lot of other people at this conference. >> john, i want to ask you -- >> that's going to be what points the market to what happens next. he's not going raise his hands
and wave them and say we're going qe. we're going to get important messages out of him. >> i'm going to ask you the same thing i asked steve liesman earlier today on "street signs." the data seems to have been pretty good late by. not great, but not awful at all. the fact we're talking about qe-3 at all confuses me just a bit. is maybe there a little more concern about europe and possibly even china rather than the domestic u.s. than the fed is letting on? the data itself would seem to suggest we don't need another round of easing right now. >> i don't think the data has been that great, frankly. you know, we had 1.7% growth in the second quarter. the latest estimates i'm seeing for the third quarter are a little north of 2%. i mean, is that now what we consider to be a robust economic recovery? that's why i don't think a lot has really changed from their perspective. payrolls are a little bit stronger, but the unemployment
rate hasn't gone anywhere this year. the durable goods numbers out just recently suggested that business investments are going to be coming down later in the year. the beige book report that just came out showed a lot of pockets of weakness. there's some improvement, but i don't think it's anything to stand up and cheer about. >> john, it's joe. i'm talking about the durable goods that came out. you have multiple analysts coming out with their expectations for the september 7th august labor report. is there a line in the sand we can draw here? the estimates are about 40 to 50,000 lower than we saw the previous month. where's the line in the sand where the market knows the response we're going to get from bernanke on the 12th and 13th? >> well, you know, i think another subdued report. i would include the september number as being fairly subdued. you know, points them in the direction of doing more. i think we'd have to see a real outlier in the context of what we've seen lately. numbers in the 200,000-plus arena for them to say, wait a second, maybe something is
changing right now. but anything that's along the lines of what we've been seeing the last few months the fed has made clear it sees as being unsatisfactory. >> john, let me ask you this. put your ceo hat on. the last three years companies have done their balance sheets as pristine as they've ever been, yet they're not hiring anybody. if they haven't hired anybody over the last two or three years in this environment, who's to say they're going to hire people now? i think it's a structural job change. what do you think? >> well, you know, this is one of the big dilemmas that the fed faces. we talk so much about this bond buying program they do. if you talk to analysts, to some of the economists who are here, they get very little bang for their buck from these things. a $500 billion bond buying program might bring down the unemployment rate by one-tenth of 1%. that's a real problem for them. it's why one of the things i'm looking for at this meeting is whether they talk more about whether they could be signaling their conviction differently in a way that gets the economy
going. i think at the end of the day, from their perspective, is 0.1% better than nothing in a context where -- i wrote about this earlier this week. i don't think they think the cost of doing more is very great at this point. that's something that bernanke seemed to be pointing to in his letter to darrell issa that came out. >> john, we know you're busy there. thanks for taking some time for "fast money" and cnbc. see you soon. thank you. >> thanks for having me. >> bk -- i asked this of a guest on "street signs." >> 2:00? is that when that's on? >> i'm trying to like you guys. >> is this a market held hostage by the fed? >> and by the ecb. both of them. the problem you have here is that the fed is concerned about their communication channel, which he has either intentionally or unintentionally been a part of. the last couple articles he's written have not moved the market. i'm sure the fed is sitting back
saying, wait a second, the way we're supposed to communicate our policy to the mark market is not working anymore. >> labor figures have been soft. they look like they're going to continue to be soft. john talks about 200,000. he just threw that out there. it is not going to happen in the next labor report. when you look at those that have been unemployed for a long period of time and now have accepted employment, 54% of those are accepting less wage just to gain employment. going even further, of that, 33% are accepting wages that are 20% lower. >> you can argue those are structural problems with the economy. jobs are not coming back, people going into services that pay less. the fed can't do anything about that. >> in that capacity, your growth expectation going forward has to be lower. >> all right. i'm sure we'll talk more fed in a bit. steve jobs once declared apple would wage war on google's android.
could the two tech titans actually be calling a truce? and stick around because our dprovrch jackson hole is just getting started. marty felde sign it was anned a psi sor to president reagan. now he's throwing his weight behind mitt romney. he'll tell you why later. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start.
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well, let's take our call of the day. no offense, stevie. piper jeffrey coming to the support of facebook saying it may be one of the best stocks to own in the tech space. facebook spent most of the day in the green but closed with minor losses. anybody here, anybody, on board with piper's facebook call? >> well, i'll tell you, i think if you look at facebook, and i've said this all the way from 45 down to 19, but you buy the stock, you put it in your drawer
for exactly this type of news. you have 900 million users. if they can get any type of revenue out of that, the stock is a winner. the guy who improved upon the facebook idea -- >> insiders selling galore though. doesn't that worry you? >> from the beginning they said they're not going to run the company for shareholders. that's why it's got to be a long-term buy and hold. you can't trade the stock. you can't say in the next three months it's going to be great. you have a long-term buy and hold. >> the argument right now for facebook is that it is now a buy and hold stock. it's a long-term investment. i completely disagree with that. ibm, there's a long-term hold. a consumer staple name. there's a long-term hold. there's no reliable, dependable earnings from facebook that warrants it being a long-term investment. it peaked in middle of 2011. mark zuckerberg, i know doc's
been all over this, he's got to come out from under the hoodie. he's got to be a ceo, or they've got to find one. >> well said. meantime, two of the most powerful ceos holding talks behind the scenes. reuters exclusively reports that they spoke on the phone last week about an ongoing dispute. jonathan weber is here to give us the details. excellent reporting. exclusive story to reuters. i was intrigued. you talked about how cook and page spoke. what did they talk about? >> well, the indications we have is that they discussed a range of the intellectual property and patent issues that are between the two companies. we don't have a lot of detail as to whether it focused on one dispute or another, but we know it was about intellectual property and their whole big set of issues beyond last week. jury verdict that could have been a part of those discussions. >> jonathan, would you think,
sir that, the motorola mobility patents are why they have just enough leverage to have that conversation? otherwise, it would be so one-sided with apple coming at google hard that this is perhaps the reason that google acquired motorola in the first place s the leverage on these patents. >> well, i think certainly the patents were a big reason for the motorola acquisition. i think it does definitely give them some leverage. in some ways, these patent fights are really all about this kind of leverage. apple got a lot of leverage with the victory last week. google certainly has a lot of leverage with those motorola patents in its portfolio. you also have to remember that some of the issues involving intellectual property between the companies could extend far beyond some of these specific mobile computing patents. there's, you know, if you think about it a whole range of kinds of technologies where they have similar products and could have
cross claims against one another. >> as you wrote, on one hand you have am dropping google's mapping software, but now you have this phone call. is this a larger olive branch or really just sort of a temporary detaunt surrounding the patent issues? >> that's what we're trying to find out right now. we honestly don't know how broad those discussions are. but i think both companies clearly see or at least the two ceos clearly see that if they can find some areas of agreement around some of these key issues, that's going to be better for both of them than to simply wage war over the next five years at the expense of many people, including consumers, probably. >> well said, jonathan. a great story. congrats to you and your team for reporting it exclusively. jonathan weber, thank you. >> thank you. >> around the horn here, guys. does this mean anything stockwise for apple or google, or is it just a nice story about the fight coming to an end? >> it can mean good things for
both of those companies. if the talks do break off and break down, then i think it's exceedingly bad longer term for google and for amazon, who depends so solidly on the android system for the kindle. because you can certainly see, brian, that if that happened, that there was some leverage that apple can gain to push google out of that space and thus put basically amazon into their arms instead of out there with google, with the android operating system. that would be a huge thing. >> i also think technology companies, not just tech companies, but they've been at the forefront of patent litigation. they can do two things. they can buy and sell patents as an asset class or sue themselves into oblivion. >> i think that's what you're going to continue to see, them suing themselves into oblivion. the apples, the googles, i don't think it makes much difference. for the derivative players, i think it does. samsung with the long-term evolution technology, going after apple, that affects the derivative players.
>> all right. moving on. warren buffett celebrating his 82nd birthday today. >> happy birthday. >> happy birthday. in honor of the special occasion, we're visiting the oracle of omaha's portfolio and breaking down the best bets from it. mr. birthday yourself. >> you just said get out of here. now you want to talk to me. i see how that works. >> i don't stay mad long. >> neither do i. that's why we like each other so much. phillips 66. it it's been exceptionally good. the knock on this stock has been their margins. i think they have to improve there. i think that things are in a sweet spot for these guys. you have these stubbornly high gas prices. oil is moving in their favor. i think that's one stock that buffett just announced he owns that's still worth owning here. >> i think you also look at wells fargo. if you believe in the housing recovery here in the u.s., wells fargo is probably one of the better ways to play it. but look at $35. major, major technical
resistance there. if you can get a break out from there, wells fargo will be a big winner. >> you think it will get a breakout from there? >> i think it will take another six months. >> and we've seen better performance in their mortgage portfolio, which is the large nest the united states. >> absolutely. >> do you find it at all odd that warren buffett doesn't pay a dividend with berkshire hathaway? ibm nearly 2%. wells fargo, 2.6%. i mean, that's across the board. all the stocks that this guy owns pay dividends, but he doesn't pay one. >> he seems to be rather bullish on america itself when you look at the portfolio. it's rather defensive. wells fargo has bailed him out this year. the purchase of ibm last year, not so good. >> mike? >> a lot of these names have obviously performed very well so far this year. i think if i owned them, i'd probably be sellers. what are some of the names i'm talking about? wal-mart. it's heart to imagine seeing a lot of growth.
i'd be a seller of wal-mart. proctor and gamble, kraft, same story. these are defensive stocks. that's why they've done well. i wouldn't want to continue to be in them. >> mike, thank you very much. meantime a stock that has jumped 200% in the past -- >> no. >> yes n the past decade. and an internet game that opened up a box of gains. how to move today ice big traders when we come back. at merrill lynch, we understand the importance of your goals. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch.
it is time now for pops and drops. the movers and the shakers you might have missed today. first up, a pop, and a flash back, i guess. the gap popping 2%. guys, sales soared. >> they're crushing these guys. nobody realized it, but gps has been a monstrous stock. unless the tape collapses, there's nothing to indicate it won't go higher. >> up 96% year to date, old navy rose. pop, pandora. >> they caught about 29 million shares. they waited too long to cover that short.
caught them in the after hours last night. i saw a million share block go off today right around an hour into trading at $12 a share. finished underneath that, but it was a nice move to the upside. mainly a squeeze, however. >> and a drop. a name familiar to "street signs" viewers, green mountain coffee. >> yeah, a recall from mr. coffee, single cup serving today. actually hit the stock, although green mountain said it is not their coffee maker. it just didn't do it any favors at all. i would stay away. >> and joe, a drop. freeport-mccrain. >> it has not gotten back up the 200-day moving average. stay out of it. >> a plethora. >> bing, bing, bing. big word of the day. all right. a drop. netflix down 4%. mike. >> suging they were going to have a hard time hitting their 7 million subscriber target by the end of the year.
yesterday, key data stores put out their report. that's confirming reports that cancellation rates rin creaare increasing. >> and a pop for ottawa news. a canadian tv station got a pop when a rogue bat terrorized employees for nearly 15 minutes. producers managed to coax the animal outdoors but not before it made a number of on-air appearances and bit a man who is now allegedly a superhero. >> you're lying. >> that last part was a complete lie. all right. drop. ak steel down 2%. >> ubs cut to neutral. any question is, where you been for the last five pucks? stocks have been cut in half since january. very hard to short this cut here. i think it's probably harder to boy it. >> if you want to store all those carly rey jepsen songs on your computer, you're going to need a hard drive, a big one.
seagate technology dropping 4% today. >> it had a furious run. a multiyear high. about, what, two weeks ago. i've not been in the name here, but it did sell off another 4% today. i think it pulls back probably another buck or two. >> that is the number one song of the summer, correct? "call me maybe." >> i was going to ask guy what it was. he wouldn't know. >> "call me maybe." >> he wouldn't know who carly jepsen is. not a lot of happiness with joy global. >> big reversal yesterday. got a lot of bulls excited. look at iron ore prices continuing to fall. this is a company that has an awful lot of head winds. stay away again. >> vacation in wisconsin and a wisconsin name. kohl's. >> up 3.4%. expectation was up 1.9. kohl's up today. you want to look to go into tjx.
>> i don't know how much worse it can get for the solar names, but for first solar, that was a drop of 18% today. mike, this is just a disaster. >> yeah, the hits just keep coming for these guys. they halted deliveries to the largest power plant being built in arizona. that plant is almost 85% done. there's a supply glitch for these solar panels. this is a disaster. i would stay away still. >> and finally, a drop for jersey shore but a pop for american culture. >> yes. >> snooki, you can't win them all. after three years of partying, mtv has announced that the sixth season will be the ends of the road for the jersey shore gang. snooki supporters need not worry. a jersey shore spinoff starring her roommate has been green lit for a second season. >> guy is tearing up. >> i've never seen the show.
and call me maybe? i don't know what she's talking about. >> he's too busy running and biking. >> next, a former adviser to president reagan weighs in on why he thinks mitt romney's tax plan is a win-win for all americans from the wealthy to the middle class and on down. marty feldstein joining the show live from jackson hole right after the break. at optionsxpress we're all about options trading. we create easy to use, powerful trading tools for all. look at these streaming charts! they're totally customizable and they let you visualize what might happen next. that's genius! strategies, chains, positions. we put 'em all on one screen! could we make placing a trade any easier? mmmm...could we? open an account today and get a free 13-month e ibd™ subscription when you call 1-888-280-0149 now. optionsxpress by charles schwab. there's natural gas under my town. it's a game changer. ♪
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that was for you, guy. >> number one song of the summer, guys. >> that was for you. all right, baby. call me maybe. come on. that got you through the iron man. >> welcome back to "fast money." let's move on to something more serious. seema moody has been tracking trends on twitter. >> omni vision is a hot topic on twitter. take a look at shares of omni vision popping after hours. they specialize in those image sensors used in the apple iphone. they reported first quarter revenue of $250 million. they forecasts also beat street
expectations. let's get to the tweets out there. big brown says, congrats. that took on the risk, i made my 65 cents on the short play and i'm happy. the big question on twitter, how do you trade all these apple suppliers ahead of that big launch, the iphone 5? >> my question, big brown, how is a horse tweeting? >> that's right. >> that was a fast horse. >> opposable thumbs. >> this is getting out of hand with technology. let's head back to jackson hole where steve liesman is standing by with a very special guest. steve. >> hey, brian. thanks very much. here in jackson hole, just before the event is supposed to begin this evening, and i'm here with marty feldstein, who is the chairman ameritus for the american bureau of economic research. you have the great job of telling us when we're in a recession but also when we're out. >> right. >> there are a lot of traders on the edge of their seats.
they want to know, is bernanke going to tell us tomorrow. >> of course, nobody knows, but my guess is that they will not make a decision. he's not going to tell us at this point. the economy, although it's in terrible shape, has improved a little bit in the last month, and that'll give him an excuse for not doing something, but frankly, i don't think there's much that the fed could do even if they wanted. >> i want to separate that out for a second. is it your expectation, given what you heard, because you're reading the tea leaves like we all are, that at the september meeting they could possibly do something additional? >> they could, of course, but i think based on the numbers that we've seen recently and based on the sense that interest rates are so low, what's going to be gained by yet another 25 basis points, even if they could
achieve that. it's not going to move housing. it's not going to move business investment. >> but fed chairman ben bernanke and darrell issa said there is scope for further recovery. i guess the argument would be f i can get ten basis points or 20 basis points here, i'll take it. >> but there's a risk associated with it of piling up moral liquidity in the system. once the economy starts to come back, we'll create management problems for them. they'll have to raise interest rates. that could lead to financial losses for the fed system. but it could also lead to political pressure from the congress to stop them from raising interest rates enough to deal with the amount of liquidity they've built up. if that happens, then we could see inflationary pressures. >> so thinking ahead, make that battle as little as it can be in terms of the raising of rates. >> that's right. they've already put so much on
the books that to keep adding in order to get what at best is a very marginal gain, i think would be a mistake. >> are you optimistic about this country and its finances? do you see a way out from the fiscal cliff near term and the broader debt and liabilities of entitlements longer term? >> well dor, do i see a way out? sure. do i think they're going to take us out? that's partly what this election is about. we're not going to have a clear sense until we get past november, and even then it's going to be very uncertain. >> brian sullivan has a question back in the nasdaq. >> question, mr. feldstein, thank you very much for spending time with us today. i want to ask you about taxes because there's a huge disconnect. we're hearing from the romney/ryan camp that their tax plan will not raise taxes on the middle class. we're hearing from the president that the romney/ryan plan will
raise taxes on the middle class. it's easy to be confused. what's the truth? >> well, i wanted to check that out. i looked at the most recently published irs data. that's for 2009. i said, what if you put in place all of the tax cuts that governor romney is talking about? could you do that and offset it without increasing taxes on anyone with less than a six-figure adjusted gross income, with anybody not earning less than $100,000. the answer is you can. you can make changes in taxable income for the high income group so that you don't have to do anything to people earning less than $100,000. >> but should we, sir, raise taxes even gently on those making 250, 500,000, $1 million a year? should we do that? >> well, the key thing in my
mind is what happens to marginal tax rates and incentives. also, what happens to the taxation of capital gains and dividends and of course corporations. so i think that broadening the tax base, which is what the bull simpson folks talked about, what i talked about for a long time, what ronald reagan did back in '86. that's the way to reform the tax code. >> marty, let's move along. by the way, he's written an excellent piece in "the wall street journal" wednesday that came out about this very subj t subject. let's go to europe now. you have some thoughts -- >> let's not go to europe. let's talk about europe. >> what is your expectation? i've heard a lot of people say that given the things the european central bank will be doing, that it's a pretty good bet the euro has to weaken from here. >> well, i think that would be a
very good thing. i mean, so far the euro hasn't weakened, but i think that a weaker euro is the key to helping italy and spain and perhaps others deal with their very large current account imbalances. they can't devalue their currencies because they don't have their own currency. but if the euro were to come down from its now roughly 125, if it came down to parody with the dollar, which is higher than it was at some of its low points in the past, if it came down that way, that would give a big boost to those economies. >> i'll pre-empt the questions. is that a policy you think mario draghi is likely to pursue? >> i think the policies he's talking about, including monetary easing, substantial monetary easing, could contribute to that. >> okay, marty. thanks very much for joining us. >> good being with you, steve.
>> guys, we have a lot of coverage. san francisco fed president john williams will have the headlines from the bernanke speech straight up at 10:00 eastern time. then guests throughout the day from jackson hole. guys. brian. >> steve, thank you very much. mr. feldstein, thank you very much. now let's send it around the desk here. not a lot necessarily to trade as far as stocks, obviously. i think the tax issue is worth noting. guys, i'm probably as confused as many americans are about what's really going to happen here. >> you know like many americans who can do the math that we have a spending problem, not a taxing problem, not a revenue problem. and that is the big item that has to be addressed and discussed by both the candidates for president. i hope when they do have that debate that this is one of the topics they address. >> and we need growth, too. spending is one side of the equation. the denominator is growth. if growth goes up, it raises the
denominator, brings down the ratio of spending. where's the growth plan from anybody? >> that's the important point, right? if you would just go out there and cut government spending and we have a flat gdp, you have the u.s. version of austerity. we've seen how well that has worked out for europe. so you got to be very careful. the economy is very sus eptable to shocks right now. while it might be fine in the long run and acceptable to cut spending, you can't do is in a cliff-style manner like both parties are looking at doing now. >> let's move on. makes my stomach a little upset. let's switch it up. >> it's that hot dog. >> two hot dogs. let's hit some options action with mike. you saw a big bet in a name in the semi space today. >> a name that's been hard hit. it has rebounded somewhat, but i was looking at cypress semi. we saw somebody aggressively buying october 12th calls. this paying about 60 cents. this is a bullish bet that the stock could be uch as much as
8 -- up as much as 8% or more by october. they just announced they're going to be presenting at a number of conferences coming up next month, the first starting next week. citi, deutsch bank, and think equity all have conferences. they'll be presenting at each of those. i think a lot of people will be stepping in saying maybe they'll explain how they're going to build their business. >> you can catch more options action tomorrow and every friday at 5:00 p.m. and check the show out on its new facebook page, facebook.com/optionsaction. all right. our guest after the break is turning china's slow down into money-making opportunities. it's not all bad if things slow down there, so says helen zhu. she'll tell you exactly what you should be buying and selling with chinese stocks multiyear lows. stay tuned. >> can we ask her if she knows about this "call me maybe"?
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♪ >> call me a dummy. sorry. talk on the slowdown in china continues. the composite hitting levels not seen since 2009 this week. but are there gains to be found am amidst china's pain? joining us is helen zhu. first off, rescue us from the bad music here. give us some info on china and how your clients can profit from the slowdown in china. >> thanks, brian. well, i think the slowdown in china has been quite painful for a lot of people, so unfortunately i think most people have been finding there's been less profits recently. we think that this is probably more of a short-term issue.
certainly china is at a difficult cross roads at the moment with significant amounts of cyclical stress and probably given the political transition upcoming. still a little too early to see the fairly kig cant structural reform materialize. given the cyclical stresses, a lot of attractive sectors like insurance, retail, et cetera, are all now trading at very, very low levels. so we think it's actually a pretty interesting entry opportunity for some of these types of sectors. >> so helen, we're focused on the monetary policy that comes from the pboc. what is the expectation? are we going to see further easing or potentially a stimulus quasi, like a mini plan of what we saw in 2009? >> that's a great question. i think we have seen a little bit of a mixed trend recently.
since a few months ago, we did see a couple of interest rate cuts in june and july. we also saw that loan growth was fairly healthy for a couple months. the month of july was really a bit of a disappointment, particularly in terms of loan growth. and the fiscal side was a little tighter versus the previous month. looking forward, we think there's room for monetary policy to loose an little more. in terms of both rate cuts as well as rr cuts. we actually think that loan quotes many m-2 this year in the second half of the year should pick up a little bit versus the first half. however, we certainly do not see much potential of a big stimulus the way that we had seen in 2009. i think part of that is because the overall picture right now is not nearly as bad as 2009 in the beginning was either. so hopefully we can avoid that. but, you know, if we do see meaningful further weakness in terms of the export picture,
policymakers may take a more proactive stance. in the near term, we probably see limited capacity for adjustments on property policy because of the asp pressures. >> hey, helen, it's brian kelly. if you look at the forward rates and the actual spot, it looks like money is starting to flow out of china, that perhaps the pboc is actually supporting the currency here. are you seeing any anecdotal evidence of people taking money away from china and no more fdi? >> well, i wouldn't say there's no more fdi. i think fdi continues to happen. but i think in terms of anecdotal evidence, sure, you know, i think people have become more, you know, worried, concerned regarding china's lack of structural reforms over the past couple of years. so, you know, we do see anecdotal evidence of people around us who have been perhaps moving some of their assets overseas, you know, trying to look for opportunities such as
the depressed u.s. housing market that seems to be heading for a rebound in the medium term, et cetera. yes, we see some of that. hopefully that's not going to be a permanent trend. >> helen, thank you very much for spending time with us here at "fast money" and putting up with us as well. >> thank you. coming up, one of our trader's bets is bottom dollar on our trade of the day. stick around to find out what is behind that. >> that's music. oh, no. they should have kept the doobie brothers going. thank you. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity.
all right. it is time for the moment that you have been waiting for. our trade of the day. brian kelly, what is behind the curtain? >> behind the curtain is the good old u.s. of a. this is what you hear tomorrow morning from ben bernanke, particularly if he doesn't say anything about debasing the currency any further. you look at europe. they're going to have to debase their currency. all of them reversed today. they were not waiting for ben bernanke.
uup is your play. >> not so fast, john and joe. our traders are quick, but they're not always right. nobody can be. john and joe both looked for upside in ag co. take a listen. >> think about the situation that we have going on. corn production. who's going to make up the shortfall? it's going to be the brazilians. you look at case new holland. you look at agco. they have the exposure selling the equipment to the brazilians. those are the plays. >> i would say agco is worth a look at well. not just john deere, but competitor agco. might be a little cheaper on a relative basis. >> all right. well, shares of agco are down about 7.5% since joe's first call. >> i'm sure there's a song that guy could reference. "keep holding on" or something. this is when looking into future earnings you'll know if you're correct. keep holding. >> when the levee breaks. that's the song that comes to
mind. keeps on raining, levee is going to break. a little zep in there. >> on a relative basis, it did get cheaper. you're not going to plow fields that are drought ridden. hopefully the farmers get a little relief. >> i tell you what, knowing the ceo there, he's a german native, lives in, you know, georgia, where they're based. the guy is very international. they've looked around the world. it's not just the domestic u.s. play. they do the farm equipment. >> that's why we want to buy it. >> but with this, look toward the suppliers. the ground out there is pretty dry. if you get some flooding, you're going to wash all that fertilizer off the feel. you might get a pop up in potash. look at intrepid potash. >> your first move tomorrow when we return. more "fast" right after this. [ male announcer ] drive a car filled with
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ready to help. it's no wonder so many investors are saying... [ all ] i'm with scottrade. quick around the horn for final trade. mike. >> october calls in cypress. worth a look. >> national oil well varco. >> guy? >> general mills, gis. >> okay. >> i don't have fancy graphics. just buy the usa uup. >> joe? >> 103 is the new price. >> thanks, every.